Naira Hits Strongest Level in 2025 as External Reserves Climb to $43.17 Billion
- The Nigerian currency hit the highest level in October 2025 against the US dollar amid $43.17 billion rise in external reserves
- Data from the Central Bank of Nigeria (CBN) indicated that the naira appreciated to N1,421, the highest level since January 2021
- Experts have said that the naira is expected appreciate to N1,400 per dollar by December 2025
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Nigerian naira ended October on a strong note, marking its highest value of the year against the US dollar.
Data from the Central Bank of Nigeria (CBN) showed that the local currency appreciated to ₦1,421.73/$ at the official Nigerian Foreign Exchange Market, its best performance since January 2025.
Source: Getty Images
Foreign portfolio inflows boost market liquidity
Throughout October, the naira traded below the ₦1,500/$ mark, reflecting relative stability in the official market.
Compared to the closing rate of ₦1,475.34/$ in September, the naira appreciated by 3.63%, signaling renewed confidence in Nigeria’s foreign exchange market. Its weakest point during the month came on October 17, when it slipped to ₦1,475.35/$.
At the parallel market, the performance mirrored the official trend, with the naira closing at ₦1,450/$ on Friday, according to figures from CardinalStone.
Analysts at AIICO Capital attributed the naira’s recent strength to increased activity by foreign portfolio investors (FPIs). These investors injected fresh dollar inflows into the market, improving liquidity and easing demand pressure.
“The naira appreciated during the week, buoyed by improved foreign currency supply from foreign portfolio investors who sold USD positions,” AIICO Capital said in its weekly review. “This steady inflow of funds strengthened supply conditions and supported a 2.48% week-on-week gain.”
The firm noted that the consistent inflows have shifted market sentiment in favor of the naira, with the dollar’s availability now exceeding local demand across trading platforms.
Nigeria’s external reserves rise to $43.17 billion
Adding to the positive outlook, Nigeria’s external reserves climbed to $43.17 billion as of October 30, 2025, up from $42.35 billion a month earlier, according to CBN data. The increase of $819 million — a 1.93% growth — indicates stronger external buffers and improved foreign asset accumulation.
Analysts say the rise in reserves provides the CBN with more leverage to stabilize the naira and manage FX interventions when necessary.
Dangote Refinery, import reduction strengthen naira
In its macroeconomic report, CSL Research pointed to Nigeria’s stronger external sector and improved current account balance as major contributors to the naira’s performance.
The country recorded a $5.3 billion current account surplus in Q2 2025, up from $2.9 billion in the previous quarter, largely due to a contraction in imports and modest growth in exports.
According to a report by Punch, CSL highlighted that increased local refining capacity, especially from the Dangote Refinery, helped reduce the need for imported petroleum products, easing foreign exchange demand and stabilizing the naira.
Investor confidence and CBN support sustain momentum
Another factor driving the currency’s rally is renewed foreign investor confidence in Nigeria’s reform agenda.
CSL Research noted that global institutional investors are holding long, unhedged naira positions due to improved policy credibility and favorable interest rate differentials.
According to the firm, investors who bought OMO bills at 24% interest rates in late 2024, when the naira traded around ₦1,650/$, are now earning 36% net returns in US dollar terms, a performance that has made Nigeria one of the most attractive emerging markets for carry trade investors.
“The profitable carry trade dynamic, alongside CBN interventions and stronger trade balances, has reinforced naira stability,” CSL Research said.
Outlook: Stability expected to continue
Analysts project that the naira will maintain its momentum in the coming weeks, supported by steady foreign inflows, improved reserves, and disciplined monetary management.
With rising investor confidence and stronger economic fundamentals, Nigeria’s currency may continue to defy headwinds — even amid global uncertainties and tension with the United States.
The current naira rate confirms analysts' predictions that the naira will hit N1,400 or N1,450 per dollar before the end of 2025.
CardinalStone Research disclosed in its macroeconomic update that it anticipates the fall in inflation to boost the Nigerian currency.
Source: Getty Images
Earlier, the National Bureau of Statistics (NBS) revealed in its latest Consumer Price Index (CPI) that Nigeria’s inflation rate declined to 18.02% in September 2025, compared to 20.12% in August.
Naira gains N224 as GTBank, UBA slash dollar rates
Legit.ng earlier reported that the naira, continued its strong performance, appreciating both in the official and parallel foreign exchange markets.
Data from the Nigerian Foreign Exchange Market (NFEM) shows that the naira has gained steadily for three consecutive days, reaching its strongest level since the Central Bank of Nigeria (CBN) launched the Electronic Foreign Exchange Matching System (EFEMS).
At the close of trading on Thursday, October 30, 2025, the naira appreciated to N1,436.97 per dollar, up from N1,444.42 recorded a day earlier, a 0.52% daily gain.
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Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
